US turns attention to Chinese garlic, tuna and laptops as trade war escalates

14 May 2019, 09:27 | Updated: 14 May 2019, 16:35

US officials have issued a list of $300bn worth of Chinese goods earmarked for further tariff hikes as the bitter trade war between the two countries showed no sign of abating.

The list of 3,805 goods including laptop computers, saw blade parts, tuna and garlic, was published after Beijing said it was preparing to impose duties of up to 25% on $60bn of US imports.

It was a step towards carrying out Donald Trump's threat earlier this month to extend punitive 25% duties to all imports from China, the US Trade Representative (USTR) said.

Escalating trade tensions between the world's two biggest economies have prompted steep falls in world stock markets amid fears about the impact on global growth.

On Monday, New York's Dow Jones Industrial Average fell 2.4% and the tech-heavy Nasdaq lost 3.4% in its biggest drop of the year.

Asian markets later also turned lower, with indices in China, Tokyo, Hong Kong, Australia and Taiwan all in the red overnight.

European and US values saw a tentative recovery on Tuesday despite the latest development.

Trade tensions have been simmering between Washington and Beijing since last summer - with US claims that China steals technology at the heart of the dispute.

Since then there have been hopes that the two sides would come to a resolution but the Trump administration now claims that China has backtracked on commitments it made during talks.

Last Friday it carried out a threat made by Mr Trump to raise tariffs on $200bn of Chinese imports from 10% to 25%.

:: Listen to the Daily podcast on Apple Podcasts, Google Podcasts, Spotify, Spreaker

That was followed by China's announcement on Monday relating to 5,200 American products including batteries, spinach and coffee, set to come into force on 1 June.

The new list issued by the US in response "covers essentially all products" not already affected by punitive tariffs, the USTR said.

It said a hearing on 17 June would be held in Washington before deciding how to proceed.

Mr Trump has warned China's leader Xi Jinping on Twitter that China "will be hurt very badly" if it does not agree to a trade deal.

Both governments have indicated that more negotiations are likely.

Mr Trump said on Monday that he and Mr Xi would meet during the G20 meeting of major economies on 28 and 29 June in Japan.

The six weeks before that meeting will be "highly volatile" for financial markets, Macquarie Bank analysts said in a report.

"Both sides have the incentive to act half-crazy and unpredictable before that in order to cut a better deal," they said.